DAX 40-listed Mercedes-Benz Group AG (DE:MBG) is exploring the sale of its dealerships and workshops in Germany. As reported by Germany’s Handelsblatt, the company will review its 20 branches with 80 dealerships for a potential sale. The value of each branch is estimated to be up to €40 million.
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Post-announcement, MBG stock traded down by 1.22% on Friday. In 2023, the shares fell by over 5%. Mercedes-Benz is among the leading luxury car manufacturers in the world.
Replicating the Strategy’s Success
In the past, Mercedes-Benz successfully sold numerous showrooms across Europe, including the UK, Italy, Spain, and certain other markets, and received a positive response to its restructuring strategy. Mercedes aims to replicate the same success by exploring the sale of its retail branches in Germany. Handelsblatt also reported that the company is not looking at any branch closures and is aiming to ensure the competitive spirit among the branches.
The company is examining selling its branches to well-established dealer groups that possess “automobile retail expertise” and can commit to preserving jobs in Germany.
2023 Performance Snapshot
In 2023, the Mercedes-Benz Group successfully sold 2,491,600 vehicles, marking a 1.5% increase over last year. This highlighted the demand for the company’s sought-after cars and vans, along with a strategic emphasis on electric vehicles (EVs), despite facing challenges in the supply chain.
During the year, sales of the company’s fully-electric passenger car sales or BEVs (battery electric vehicles) experienced a remarkable 73% increase. The combined sales of BEVs and hybrids constituted 19% of the total passenger car sales last year.
After achieving its sales target in 2023, Mercedes-Benz expects its sales momentum to continue with key additions such as the electric G-Class, the Mercedes-AMG GT Coupé, and the eSprinter.
The company is scheduled to report its Q4 numbers and annual results for 2023 on February 22, 2024.
Is Mercedes a Good Buy Stock?
According to TipRanks’ consensus, MBG stock has received a Moderate Buy rating based on recommendations from 20 analysts. This includes 11 Buy, seven Hold, and two Sell recommendations. The Mercedes-Benz share price forecast is €71.76, which is 21% higher than the current price level.
